Freddie Mac to Rev Up on Buyback Claims

On the heels of the ""Federal Housing Finance Agency's (FHFA's)"":http://www.fhfa.gov/Default.aspx announcement of its ""revised representation and warranty guidelines,"":http://dsnews.comarticles/gses-new-rep-and-warranty-guidelines-to-bring-clarity-for-lenders-2012-09-11 comes news that ""Freddie Mac"":http://www.freddiemac.com/ will be increasing its repurchase claims in the near future.

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The revised rep and warranty guidelines were designed to provide more clarity in the market, but in the meantime, the ""FHFA Office of Inspector General (OIG)"":http://www.fhfa.gov/Default.aspx?Page=122 reports Freddie Mac will increase repurchase requests to between $0.8 billion and $1.2 billion this year and between $2.2 billion and $3.4 billion overall.

In the past Freddie Mac has generally reviewed loans that defaulted within two years. However the FHFA OIG suggests the GSE should also review loans that default within two or three years after origination, according to report released Thursday by ""FBR Capital Markets."":http://www.fbr.com/

FBR reports it is likely much of the repurchase claims will go to Bank of America, which reached a settlement with the OIG regarding put-back claims last year.

However, Freddie Mac's new repurchase claims will reach other institutions as well.

FBR believes ""it is likely that banks have reserved for this anticipating Freddie Mac would ultimately be as aggressive in repurchase claims as Fannie Mae.""